Free Markets, Free People

bureacracy


Freddie Mac and Fannie Mae execs bonus pay–seriously?

While the administration regularly takes Wall Street to task for what it calls excessive bonuses, especially to companies bailed out by taxpayer money, it has been relatively silent about the bonuses approved by its own Federal Housing Finance Agency for two quasi-government companies at the center of the housing market meltdown:

The Federal Housing Finance Agency, the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government-sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure.

Remember AIG and the huge uproar over the bonuses they were contractually bound to pay soon after the bailout?  Well these bonuses weren’t wrapped up in any contractual binding.  These have been approved since that time.  And to top it off, on average, they’re larger bonuses than AIG paid.

You’d think the FHFA would have a clue, wouldn’t you?  You’d think they’d understand the “optics” of this sort of a payout of taxpayer money, not to mention that the government is supposedly trying to cut spending.

But obviously they don’t understand that.  

Thankfully the Congress has thus far reacted to the situation in a swift and positive manner (for once):

The House Financial Services Committee, responding to lawmaker anger over compensation at Fannie Mae and Freddie Mac, approved a measure that would suspend the compensation packages for executive officers at the companies. The bill also would require employees of the two firms to be moved onto a pay scale that lines up with federal financial regulators including the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency.

“Awarding lavish pay packages to the heads of these companies that have accepted $170 billion in taxpayer cash can’t be defended,” Representative Spencer Bachus of Alabama, the panel’s chairman and sponsor of the bill, said today.

We will see if they carry it on through and actually get something passed, but even Barney Frank, who initially opposed the bill is now supporting it.  And when Freddie and Fannie have lost Barney, they’re in trouble:

Representative Barney Frank, the top Democrat on the Republican-controlled panel who initially opposed the measure, voted for the bill because of what he described as “insensitivity” by the companies in continuing to award bonuses.

“I had hoped that they would use restraint on their own because I think it’s better that we not intervene,” Frank, of Massachusetts, said today. “But they did not.”

Again, the “insensitivity” wasn’t something the companies did, although they likely requested the bonuses.  It was the FHFA, a governmental agency, which approved the bonuses.  It is business as usual among the bureaucrats who are obviously “insensitive” to the situation and continue to lavish taxpayers money where ever they decide it is deserved.  If you want a clue as to why the federal government’s spending remains out of control, this is a good example.

Bureaucracies are forever it seems and they become the unaccountable drivers of government action.  It is there which, if any meaningful reform is ever to be undertaken with shrinking the size and cost of government is to be done, where reformers must start.

~McQ

Twitter: @McQandO


GOP plans on reining in the EPA

Between screaming birthers, edited Constitutions and not-yet members of the House voting, the House of Representatives under GOP rule got off with some fits and starts.

However, there was something of note besides the mostly symbolic attempt to repeal ObamaCare  (something that the CBO says would “cost” us about 230 billion  – well at least until they further revise it down to nothing after it fails), something of actual importance seems to be emerging:

Dozens of Republicans used the opening day of the new Congress on Wednesday to introduce legislation that would bar the Environmental Protection Agency from regulating greenhouse-gas emissions.

48 Republicans and one Democrat (Boren- OK) are co-sponsoring the effort (that one Democrat makes it a “bi-partisan” effort under the definition of the term last Congressional session /sarc).    Read the next part carefully:

The bill would amend the Clean Air Act to declare that greenhouse gases are not subject to the law, according to a brief description in the Congressional Record.

What that’s not saying is “greenhouse gases are not subject to the law” – it is saying greenhouse gases are not something that the Clean Air act has the jurisdiction to legislate.  What Congress is trying to say to the EPA is “you stay out of the greenhouse gas business until we pass a law authorizing you to be in it”.

This is actually good news for the taxpayer.  If passed it will prevent EPA from unilaterally imposing emissions standards and defacto taxes on emitters via fines and fees.  The EPA’s primary targets would have been large emitters like power companies.  And any “fees” charged would have gone directly to power customers.  Effect?  It would have hit those who can afford it least the hardest.

Of course, the other good news is the incoming GOP majority is less enthralled with the pseudo-science of climate change and thus less likely to impose economic penalties than was the former Congress.  So we should see some backing away from the former trend of trying to tie energy and climate change together.  Or as the Hill notes:

While GOP leadership’s specific legislative approach to attacking EPA remains to be seen, the quick introduction signals that blocking climate rules is plainly on the agenda for the new GOP majority.

That gets a hearty “good” from me.

This also signals – or at least I hope it does – some intent on the part of the House to do some regulatory oversight.  You know, actually make the bureaucrats justify their regulations and their existence.  If you want an area that is fat for reduction, many of the bureaucracies are a wonderful place to start.

~McQ


Back at it – so let’s talk politics

Well after a couple day hiatus, I’m ready to go back at it. Sometimes you just have to take a couple of days off to clear the mind, enjoy the peace and joy of the Christmas season and reflect on the 2 inches of snow in you yard on Christmas day (first in at least many decades) and curse global warming. Heh.

Drove to Memphis and back yesterday – no not just to do it – dropped the wife off with her sisters. Snow flurries all the way through Georgia, Alabama and Mississippi. Roads closed due to ice near B’ham. Had to reroute which cost some time. When I came back through they’d cleared it all out.

Cold as hell. It only got above freezing by a couple of degrees all day, but the wind – brrr.

Anyway, let’s sit back and contemplate the upcoming year politically, shall we? As it turns out, this one hasn’t been the best one for Democrats (although they’re now trying to claim it was outstanding due to the lame duck Congress). "Shellacked" in November the Democrats yield their majority in the House. That means that Republicans there will be writing next year’s budget (due around March) and Rep. Paul Ryan will be the man to watch since he now heads the House’s budget committee.

Question: will Republicans put forward a budget heavy on spending cuts or will they skirt the issue? My sense is that Ryan is going to put out an aggressive budget with significant cuts and the GOP is going to ask everyone to "make sacrifices" as they attempt to wean us from some of our dependency on government and other people’s money.

Of course I could be wrong and the Old Bulls could decide that controversy isn’t the way they want to go with 2012 looming – but that would be a mistake in my estimation.

Meanwhile it is reported that Obama is set to "shuffle his staff". Well, given the present one, it’s hard to imagine he could do worse with the shuffle. In many cases he’s been ill served by the present staff. That’s not to say he hasn’t made plenty of unforced errors himself, but these first two years have been marked by an aura of amateurism and a weaker president.

The first personnel change inside the White House is the arrival of David Plouffe, who managed Mr. Obama’s presidential campaign. For the last two years, Mr. Plouffe has been one of the president’s closest outside confidants, but he is set to replace Mr. Axelrod as his chief political adviser, with a broad portfolio.

Frankly, I think Axlerod has been out of his depth in the White House. He was most at home campaigning/running a campaign, but never seemed to understand that the campaigning stops on Jan. 20th of the following year if you candidate wins. I’m not sure Plouffe will be much of an improvement.

At the final cabinet meeting of the year, on Dec. 8, the president renewed his request that if any members intended to step down, they needed to signal their intentions. White House officials said they believed that Defense Secretary Robert M. Gates is the only cabinet member who definitely plans to leave next year, although one other departure is possible.

This is one I have no idea about who the replacement will be.  Many names have been bandied about, but this is a very critical position.  My guess is Joe Biden is going to try to exert some influence here and we most likely are not going to be happy with the choice – nor is the military.

One departure that many will welcome – if it happens – is Bagdad Bob Gibson:

But at the midpoint of his term, several aides are considering new opportunities, including the White House press secretary, Robert Gibbs. Mr. Gibbs will probably either become a senior adviser to the president or work outside the White House, defending Mr. Obama on television and beginning to define the field of 2012 Republican presidential candidates. The leading contenders for his job are Jay Carney, a spokesman for Vice President Joseph R. Biden Jr., and Bill Burton, a deputy press secretary.

Now Gibson has been no worse than some of the worst press secretaries I’ve witnessed over the year, but there’s something about his manner that just irritates beyond the usual irritation level.  Certainly I wouldn’t want to have that job in any circumstance, but if it is your job, you should at least bring some level of integrity to it, and I’ve not seen that at all during Gibson’s tenure.  I have no idea if the 2 possible contenders would be better than Gibson in that area (maybe the job preclude integrity) but it would be nice to see if they would.,

Something as predictable as the dawn is going on within the administration as well:

Two months before the midterm elections, even before it became clear that Democrats would lose their Congressional majority, the president ordered a review of how the White House operated and how it could be modernized. The mission of the Reorganization Plan, as it is called at the White House, expanded after the sweeping Republican victory.

Pete Rouse, now the interim White House chief of staff, was already working on the plan in October when Rahm Emanuel stepped down as chief of staff to run for mayor of Chicago. The process has been a highly guarded secret even inside the White House, with Valerie Jarrett, a senior adviser; Robert F. Bauer, the general counsel; and Mr. Axelrod also providing guidance.

The president was frustrated by the bureaucracy of the administration, aides said, and asked Mr. Rouse to recommend ways to improve internal communication and efficiency.

Yes, it must have been the organization of the administration that contributed to the “Republican victory” or, at least, the inability to ameliorate the losses.  In fact, of course, it had little to do with the organization or the message.  Instead it had to do with pushing an unpopular agenda at a time with the focus should have been on other things – jobs and the economy.  It is one of the reasons that even while Democrats celebrate the number of “accomplishments” rendered by the 111th Congress their approval rate remains low.  It isn’t about the “number” but the desirability of the accomplishments that count.  Voters signaled most emphatically they were dissatisfied with that Congress’ “accomplishments” in a most damning way in November.

Of course a true bureaucrats answer to such a defeat is to tinker with the bureaucracy looking for ways to “improve internal communication and efficiency” even while improvements in both would be irrelevant to the real reason for they administration’s perceived failures the previous two years.

And, a new strategy is emerging which smacks of what?  In a word, campaigning:

Mr. Obama intends not only to extend a hand to Republicans but also to begin detaching himself more from Congress and spending more time making his case directly to the American people.

He may find it harder to “detach” himself from Congress than he thinks, although if successful he might gain a few approval points.  But if history is any teacher, the “detachment” will be an acrimonious one with the usual attempt at blame shifting common to the Obama presidency to this point.  And the people have pointedly said any number of times that they’re tired of the president trying to blame everyone else for his problems.

And how about an imperial presidency?  I have to wonder if the rabid left, who got so exercised about George Bush’s use of executive orders will find it within themselves to level the same criticism at Obama?

“In a world of divided government, getting things done requires a mix of compromise and confrontation,” said Dan Pfeiffer, the White House communications director. “What are the things you can do without Congress? In some cases, that involves executive orders, but it also involves using the bully pulpit of the presidency to make a political argument about the direction of the country.”

Interestingly the man who was touted as the 2nd “great communicator” has been singularly ineffective in his first two years of effectively using the bully pulpit the presidency provides.  Will he rally his supporters in the next 2 years with its use?  Or will he remain the same ineffective communicator he’s been these past two years?  Have the American people finally seen through this guy and his penchant for high sounding rhetoric?  Can they again be seduced into voting for a guy who many (among those who voted for him) have come to consider an empty suit?

Stay tuned for 2011.  It will indeed be an interesting year.

~McQ


It took 70 days to accept foreign help on the oil spill?

Why?

Really – I want to know.  Why did the “we’ve been on the job since day one” crowd take 70 more days to decide they should accept some offers of help that began coming in within 3 days of the spill.

(Via Hot Air):

The National Incident Command and the Federal On Scene Coordinator have determined that there is a resource need for boom and skimmers that can be met by offers of assistance from foreign governments and international bodies.

The United States will accept 22 offers of assistance from 12 countries and international bodies, including two high speed skimmers and fire containment boom from Japan. We are currently working out the particular modalities of delivering the offered assistance. Further details will be forthcoming once these arrangements are complete…

The Department has released a chart of offers of assistance that the U.S. has received from other governments and international bodies. The chart is updated as necessary to include any additional offers of assistance and decisions on accepting the offers.

The chart shows a good number of more offers still under “consideration”.

Why?

Why isn’t that equipment and technology already here and deployed?

What is going on with the “day one” crowd?  Why are we still screwing around deciding what offers should or shouldn’t be accepted?

Meanwhile, the red tape continues to stymie efforts to clean up the spill.

Freakin’ amazing.

This vid sort of sums it all up.

Oil Spill Timeline from RightChange on Vimeo.

~McQ